Thursday, April 11, 2013

I'm calling BS

We hear that the Dolphins did "open their books" to the county, with the county hiring two "outside auditors" who we hear the Dolphins steered them to...

The one-page summary they provided shows the Dolphins made $25 million last season, but stand to loose $14 million this season due to their spending on free agents.  That's in ""operating profits" with no explanation.  I am calling complete and total BS on these figures.  I have no idea what their measurement was, what figures were in- or ex- cluded, or whether this is based on any fact.

But how convenient that when they are asking for a handout, they spend on free agents and that it would appear they'll be losing money - so no way could they afford to do this themselves.  This is a load of it, and the county commissioners shouldn't have bought it, and neither should you.

This rushed timeline only serves their interests. The carrot of the superbowl being voted on is the perfect way for them to cram it down everyone's throats.  But, as I've said before, that's complete BS, too.

Now as for the financing, here's the general plan in my words, not spun by a rep hired by the team:
  • The renovations will now  cost $350 million (down from the $400 they proposed, but still up from the estimated of about $150 million they proposed 18 months before this one for the same things!)
  • The county will "loan" them about $170 million
  • They will also borrow somewhere around $150 million from NFL
  • That means...the Fins really only have to come up with about $30 million up front (and if the construction costs them less, then the fins pay less)
And here's where the county end comes into play:
  • To get the $170 million, the county will take out a loan. Lets do a little math here.  We'll use simple interest to make the calculation easier - and to be honest I'm not sure if its compounded or not - if it is its waaaaay more than this:
    • At 4%, the interest payments over the course of 26 years amount to $182,000,000 (yes, the interest is more than they borrow)
    • Or essentially that means that they have to pay back $357 million!
    • The country proposes to pay back the amount over 26 years using $7.5 million in the bed tax dollars every year (with a little wiggle room to use more at a future date - we'll leave that out for now).  The math here means that they will have paid back about $195 million - leaving $162 million to be paid back.
  • The Dolphins will pay back $112 million at the end of 30 years.  With no interest. (and they get to keep the $58 million difference, isn't that nice?!)
  • In a way that means that the county can cover $112 million of the $162 million it would likely still owe - after a 4 year gap - basically meaning they lose about $50 million on the money, assuming they have to pay the rest back themselves and there's an interest cost to this.
The county loan, then, is interest-free, to the fins.  That's ANOTHER interest-free loan they'll be holding onto.  As I've noted before Joe Robbie got the original money interest-free.  And Wayne got either an interest-free or low-interest loan to renovate for the Marlins.

No one knows how the NFL fund works, but it is generally assumed to be an interest-free loan that is paid back at a very slow rate from revenue the NFL would typically divvy up to the team. 

The state also may agree to give the Dolphins $3 million a year in "tax rebates" for 30 years which amounts to $90 million in money that impacts their bottom line.

At the end of 30 years, then, the Dolphins will have had $410 million in direct benefit to them - and they get any additional revenue associated with stadium improvements (if there's a cover, and seats closer to the field, that may mean they sell more tickets, or get an indirect benefit from the large events - who knows how much that would be over 30 years, but its probably billions).  And there's a likelihood that some of that $410 million could be managed in a way that nets it a modest amount of interest.  So at the end, the Dolphins come out at least hundreds of millions ahead in the game.

The county comes out behind (by at least $50 million, but there could be other factors that weigh into it). And Dade county tax payers get to cover that.

The NFL comes out whole.

And it gets paid for by "bed-tax dollars" which sounds nice, but is still a tax (even if its paid by "tourists"), and is covered by the general fund if it ever falls short.

The Dolphins are agreeing to pay penalties if they don't get some big events, or if the team is sold in the next 5 years.  And they have to stay in Miami for the next 30...

Plus Dade county is promised all the benefit from the big events, with Broward nixed - though I honestly can't see how that would be enforced since the Dolphins don't own the big events.

Does this sound like a good deal to you?

Yeah, shade sounds good - but its easy to see how many more "premium" seats there would be and how the cost of tickets would go up as a result.  We, as fans, stand to lose on that end...

The referendum date is set for May 14th.  If you live in Miami-Dade county, plan to get out and vote.  If you know someone that lives there, urge them to get out and vote.

Look at the numbers.  Huge benefit to the Dolphins.  Loss to the county.  No tangible benefit to the fans.

Vote NO!

[editor's note: this item was written by Bitchin' Dave and does not, necessarily, represent the views of anyone else associated with this site]
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2 comments

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I agree with you just say NO.

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The officials that made/agreed to the deal represent Miami-Dade, only a county as far as political territory terminology is concerned. They are obviously looking ahead to(their personal careers), in fact practicing for the days when they get to the Federal level so they can follow the footsteps laid down by our present spenders.